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BMW warns profits will fall, plans $13.6 billion in cost-cutting

FRANKFURT, Germany — BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, Mini and Rolls-Royce brands are to get a single sales division. Peter said that given the headwinds to earnings, "we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions." The company said the measures were needed "to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future." Automakers around the world have faced heavy up-front costs for technology expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo. BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules. BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S.

Mini Superleggera patent renderings suggest production prospects

Mini impressed us all when it revealed the Superleggera Vision concept at the Paris Motor Show a couple of months ago. But even before the little roadster concept debuted, there were already rumors of its production potential. And those rumors are only being further entrenched by the emergence of a series of patent renderings. Bearing much more than a passing resemblance to the concept, these images show what could be a revised, production version of the Superleggera, though not without its concessions to reality. For one thing, it looks like it's got a proper framed windshield, but it's hard to tell with the roof in place – something we never saw on the concept, either. It's also got more substantial wing mirrors, but the fin on the rear deck is still there, as are the extractor vents on the hood. We also note that the grille openings are the same shape as the concept's. Of course, the emergence of these images and their filing with the relevant authorities doesn't necessarily mean that Mini is moving ahead with the roadster's production. But if it did, it would likely ditch the concept's electric powertrain, and could stand to fill the void left by the discontinuation of the maligned, outgoing Mini Roadster that was essentially a scrunched Cabriolet with a cowling where the rear seats and stacked roof would be. Parent company BMW is likely taking into account that its rival Daimler didn't have much luck when it slotted a unique roadster of its own into the Smart lineup, so here's hoping that if it does give the Superleggera the green light, it'll have more success in the marketplace.

BMW's new strategy: Electric everything

Mercedes isn't the only car maker determined to beat Tesla before it gets huge. Sources speaking to German business daily Handelsblatt claim that BMW is in the midst of planning an executive shuffle that will also include a big shift in its electric vehicle strategy. While the company would still offer ground-up EV designs like the i3, the new strategy would greenlight electric versions of some of BMW's most important vehicles, including the 3-series sedan, X4 crossover, and iconic Mini. If the leak is accurate, management is likely to approve the change at the end of September. We've asked BMW for its take on the report, although it declined to comment to Handelsblatt. It wouldn't be shocking to see the Munich crew change tack, though. While Tesla has received hundreds of thousands of Model 3 pre-orders, i3 sales dropped in 2016 – the upscale (if oddly-shaped) EV just isn't as hot as it once was. If BMW electrifies some of its most popular cars, you wouldn't have to choose between a super-efficient, eco-friendly EV and the familiar designs of the brand's mainstream driving machines.The story originally appeared on Engadget, your guide to this connected life.Related Video: Featured Gallery Mini Vision Next 100 Concept View 38 Photos Green BMW MINI Electric Hybrid engadget